Policy Connection

Winners and Losers

Analysis by Traci Bruckner, SAFSF Policy Program Director

Public policy picks winners and losers – how a policy is constructed determines who wins and who loses. We see this play out in agriculture policy that supports commodity production. The largest and wealthiest farms are the clear winners – by design.

This week, the Government Accountability Office (GAO) released their review of the distribution of the 2019 Market Facilitation Payments (MFP) (also called “trade-aid” payments, the program the Administration propped up on their own, with no input from Congress.) The review was requested by Senator Debbie Stabenow (D-MI), chairwoman of the US Senate Committee on Agriculture, Nutrition and Forestry. The review gives us a clear-eyed view of who won, and by how much.

When the first round of Market Facilitation Payments were distributed in 2018, there was a limit of $125,000 per qualified recipient. That limit can be multiplied for each farm by the number of people determined to be “actively engaged in farming,” a term so loosely defined by the USDA that it is effectively meaningless (CRS Report: USDA’s Actively Engaged in Farming (AEF) Requirement). When USDA distributed the second round of MFP in 2019, they actually doubled the payment limit from $125,000 to $250,000 per qualified recipient.

The GAO report found that by doubling the payment limit, the top one percent of farms walked away with an additional $500 million. Just think – the impact of that single change to the administrative policy led to half a billion dollars flowing to the largest and wealthiest farms that otherwise would not have been distributed. They deliberately picked winners, propping up individual large and wealthy farms. For just one example, a single farming operation was subsidized to the tune of over $2 million (scroll to see table 5, page 17 for the full list of multi-million dollar payments.)

Payments of that magnitude perpetuate a plantation system of agriculture. It gives large and already wealthy farmers even more power and a clear incentive toward continued expansion and consolidation. While some lawmakers and administration officials defend these policies and believe they are scale-neutral. In the way this has played out, this policy is not scale-neutral. The losers in this scenario are beginning farmers, small and mid-sized farms, BIPOC farmers and rural communities.

To fundamentally shift away from policy that facilitates the consolidation of agriculture, the very structure of this policy, in particular the “actively engaged in farming” definition, must be reformed. Moreover, it should be applied to other program supports such as federally subsidized crop insurance, which currently does not even pretend to have payment limitations. Under current crop insurance law, if a single farming operation farmed the width and breadth of all available farmland, the government would pay roughly 60 percent of the cost of their crop insurance premiums on every acre, every year.

Policy reform can and should help shift the balance between winners and losers to move us toward a just and sustainable agriculture and food system.

In Solidarity,

P.S. If you want to learn more or discuss this with me directly, please feel free to drop me an email or give me a call. In addition, don’t forget to register and join us for the Policy Outlook and Strategy Conference: Climate, Agriculture, Farm Bill 2023. We will talk about this and so many other ideas and policy opportunities ahead in the coming year.

Traci Bruckner, SAFSF Policy Program Director, provides insights into key policy issues for funders of sustainable agriculture and food systems in the monthly Policy Connection newsletter for SAFSF members.